Brasilia [Brazil], February 25 (ANI): Brazil's Chamber of Deputies approved, in the early hours of Wednesday, a bill creating the Special Tax Regime for Data Centre Services (Redata), a measure designed to attract large-scale digital infrastructure investments with an estimated tax waiver of R$ 7 billion over three years. The proposal now moves to the Federal Senate, which must vote on it before midnight when the provisional measure underpinning the policy expires.

The regime aims to encourage companies to install or expand data centres in Brazil by suspending federal taxes on the acquisition and import of equipment destined for fixed assets. The benefits include exemptions from PIS/Pasep, Cofins and IPI taxes for Information and Communication Technology (ICT) equipment, significantly lowering implementation costs amid intense global competition for data infrastructure, as reported by Brasil 247.

Rapporteur Aguinaldo Ribeiro argued that Brazil must act swiftly to secure its position in what he described as a global race for critical infrastructure. He emphasised the country's comparative advantages, particularly in renewable energy capacity and a highly connected population.

Access to the incentives, however, will be conditional. Companies must allocate part of their installed capacity to the domestic market, use 100% renewable energy, meet strict water efficiency standards and invest a minimum percentage in research, development and innovation. A mandatory share of R&D funding must be directed toward Brazil's North, Northeast and Central-West regions, aligning the initiative with goals of digital sovereignty, sustainability and regional development.

The estimated fiscal impact stands at R$ 5.2 billion in 2026, R$ 1 billion in 2027 and R$ 1.05 billion in 2028, with declining revenue losses linked to the country's ongoing tax reform transition.

If approved by the Senate within the deadline, Redata could become a cornerstone of Brazil's industrial strategy for digital and artificial intelligence infrastructure, reinforcing its ambition to compete globally in the data-driven economy. (ANI)